A company invests £400,000 in a 4-year capital project. The project is expected to incur costs payable continuously throughout the first-year expenditure at an annual rate of £2,500. The net income payments from the project will be received half-way through each year, as follows: Year 1: £24,500 Year 2: £28,000 • Year 3: £32,500 • Year 4: £35,000 Finally, it is assumed that the project can be sold on to another investor for £450,000 at the end of year 4. Calculate the annual internal rate of return resulting from this investment to the nearest 0.1%.
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- What will be the equivalent uniform annual amount that will be deposited in a bank for 15 years that will be replaced the capitalized cost of a project with the following cost; The initial cost is P2,000,000 and an additional cost of P500,000 at the end of every 5 years. The annual operating costs are P100,000 at the end of every year for the first 6 years and P160, 000 thereafter. In addition, there is expected to be a major repair work cost of P300, 000 every 13 yrs. Assume i =15%.The cash flows for a project are £3,000 in Year 1, £5,000 for Year 2, and £4,000 in Year 3. The project pays back for itself in 2.5 years. The initial cost of the project was: a) £10,000 b) £8,000 c) £12,000 d) £11,0008. An investment opportunity requires an initial cash outlay of £30,000. Cash flows are expected to be as follows: Year 1 Year 2 Year 3 Year 4 (£7,000) (£2,000) £13,000 £36,000 The company’s cost of capital is 9%. Depreciation is to be charged annually on a straight line basis over the life of the project. What is the NPV of the project? a. (£2,579) b. £27,421 c. £2,579 d. (27,421)
- A project has an initial cost of $7,900 and cash inflows of $2,100, $3,140, $3,800, and $4,500 a year over the next four years, respectively. What is the payback period? Select one: A. 2.28 years B. 3.36 years C. 3.28 years D. 3.70 years E. 2.70 yearsAn investment project provides cash inflows of $1325 per year for eight yea payback period if the initial cost is $4,200? Or $5250 or $11,600?An investor invests £8,000,000 in a new factory, which takes a year to build. After construction is finished, the factory will generate an income of £104,000 monthly, received in arrears, for 8 years. Compute the yield of the investment project. 数字 Enter a percentage correct to 1 decimal place %
- The following information regarding an investment project is available. Scrap Value £10,000 at the end of 5 years Year Cash Flow 0 (£125,000) 1 £60,000 2 £50,000 3 £10,000 4 £10,000 5 £50,000 A) What is the Payback Period in years and months?The company will invest $150,000 in a project and average annual income $50,000. The investment will provide the following inflows: Year Cash inflow 1 $ 25,000 2 45,000 3 30,000 4 50,000 5 70,000 Calculate: Net present value at 15% discount factor. Payback period Accounting rate of return Note: 15% discount factor : Year 15% discount factor 1 0.8696 2 0.7561 3 0.6575 4 0.5718 5 0.4972A project is offered which requires an outlay of £6000. Returns at the end of years 1 to 5 inclusive are respectively expected to be £1000, £2000, £2000, £2000 and £500. Compute the net present value of this project if interest is estimated to be (i) 8% per annum compounded annually and (ii) 9% per annum compounded annually
- Boomerang Bungee Corp. is considering the following project. Determine the equal annual annuity for the project if the cost of capital is 14%. Initial Investment: $75,000 Year Cash Inflows 1 $30,000 2 $35,000 3 $40,000 a. $2,259.62 b. $4,355.25 c. $7,768.67 d. $5,527.89A mining project will involve the following cashflows: • Outlays: £1 million, payable immediately; £0.5 million payable annually for 10 years, the first payment being in 1 year's time; £0.25 million payable annually for 2 years, the first payment being in 11 years' time. Income: £0.75 million payable annually for 10 years, the first payment being in 1 year's time. The project is to be financed by borrowing the initial outlay from a bank, which charges interest at the rate of 10% per annum compound. Partial repayment of the loan is possible at any time. After repayment of the entire loan, net income from the project may be deposited with the bank in an account that earns 7% per annum compound, and this account will be used to pay the tail-end costs associated with the project. The required years for full repayment are Select one: a. 8 O b. 4 O c.7 d. 5 e. 6An investment project provides cash inflows of $740 per year for 9 years. What is the project payback period if the initial cost is $1,480? A. 2.00 years B. 2.02 years C. 1.90 years D. 1.94 years E. 2.04 years What is the project payback period if the initial cost is $4,958? A. 6.70 years B. 6.77 years C. 6.37 years D. 6.83 years E. 6.50 years What is the project payback period if the initial cost is $7,400? A. 3.01 years B. Never C. 4.95 years D. 5.25 years E. 1.35 years